The Senate today voted 60-38 to end debate of the Financial Regulation Reform Bill and move to final passage later today before heading to President Obama’s desk. In addition to increased power to monitor systemic risk in banks, the Bill gives regulators the ability to step in and breakup or seize the assets of financial institutions deemed to be at risk of failing and posing a threat to the financial system. It also promises to create a new federal agency called the Consumer Financial Protection Bureau (CFPB) which will police loans and financial services products that banks and others sell to consumers. This morning’s vote was primarily democratic (all but one democrat supported the bill), and Republicans for the most part are claiming that it overextends the power of the government which, they argue in the long run will cost banks a significant amount of money in meeting the new regulations and reporting requirements.
The Huffington Post is reporting that, “a team of Goldman Sachs analysts predicted in a Tuesday research note that the legislation will annually cost Bank of America about $4.4 billion, Citi about $3.7 billion, JPMorgan about $5.3 billion, Morgan Stanley about $900 million, and Wells Fargo about $2.2 billion.”
The bill seems certain to pass the final Senate vote later today and Obama is ready to sign it. The ultimate impact on the risk and compliance management market is yet to be determined, but one thing is for certain, the era of deregulation is officially over.
This week we announced another strong quarter including significant growth in software license revenue and continued profitability. Growth was driven by new customer wins across the globe and across industries including North America (Baker Hughes Selects OpenPages for Audit and Financial Controls Management and Union Bank Selects OpenPages Operational Risk Management), Japan (Mizuho Securities Selects OpenPages to Enhance their Operational Risk Management) and South Africa (Old Mutual Selects OpenPages Operational Risk Management Solution).
While the geographies and industries may differ, it is clear that across the globe, companies have a common objective to improve business performance through reduced risk exposure and better allocation of resources.
See press release for more detail.
Some months ago I came across an article co-authored by a colleague of mine on enterprise risk management. It’s aimed at boards of directors, providing needed insight into difficulties companies have experienced implementing ERM, and puts forth principles for its effective use.
What I found particularly interesting is reference to principles outlined by “legendary management thinker” Peter F. Drucker, and the authors’ description of how those principles can be applied to ERM:
Mr. Drucker, if somehow you’re listening, I hope you’re smiling at what you hear.
© Steinberg Governance Advisors, Inc. 2010. The information presented here does not constitute legal or any other type of professional advice. Companies are encouraged to consult legal counsel concerning their responsibilities for legal and regulatory compliance.